Money20/20 Europe was held in Amsterdam last week, and we were there to deepen our understanding of what it means to digitally transform. Here were our three main takeaways:
1) Banking is Transforming to a Become True Service Industry
Until recently, financial institutions have delivered products and services in ways that benefited them the most – leaving consumers with little choice but to accept their terms and conditions. The Digital Revolution has flipped this relationship on its head. Today, banking has become a true service industry with financial institutions competing almost exclusively on the consumer experience they provide. And that experience is increasingly a digital one.
Throughout Money20/20 Europe, industry thought leaders addressed this dynamic. While the importance of digital engagement is widely recognized across the industry, serving members well across digital channels remains a complex undertaking for FIs, one that requires data enrichment and an integrated ecosystem of products and services.
Fortunately for credit unions, ecosystem providers like CO-OP are there to assist, providing the tools, resources and guidance needed to deliver the kind of seamless, customized experience that members demand.
2) Open Banking Structures are Emerging Fast
Our current banking structure is a byproduct of the Industrial Revolution: goods and services are distributed through analog channels, human interaction and localized networks of brick-and-mortar businesses. This is another paradigm that is rapidly shifting.
As members increasingly embrace digital experiences, the industry is responding by constructing global networks that seamlessly distribute data to anyone, anywhere, on-demand.
This transformation presents challenges for all parties involved, including members. They, of course, want greater digital access – but they also require convenient branch access. Modern consumers of banking services want faster, more intelligent digital engagement through AI but still insist on having human interaction.
As our industry delicately balances these demands, we can catch a glimpse of the future in places like China. Within a relatively short timeframe China has transformed its banking structure into an ecosystem of fintech providers, with companies like AliPay and WePay delivering elevated, curated digital payments experiences.
The pace of digital transformation is accelerating globally, and credit unions will either adapt to this new banking landscape, or get left behind.
3) Data is Becoming The New DNA
Fraud and cybersecurity risks are on the rise, and safeguarding member data has never been more complicated. While credit unions have always collected and stored volumes of member data in their systems, most have done little to harness its power.
Going forward data must be embedded within the DNA of credit unions. Everything from purchasing activity and social media interactions to feedback on digital applications should be captured and understood. Big data and machine learning can help credit unions, making it easier to pinpoint member needs and personalize services accordingly. Ultimately, institutions that use data to both enhance security and drive innovation will rise to the top.
One thing is certain – digital transformation is no longer a fringe concept: it is here, and it will profoundly impact the world of financial services. Meeting the needs of members requires us to leverage all our resources by co-creating, collaborating and learning together. More importantly, it requires us to rethink our business models and value propositions.
CO-OP’s digital transformation journey is well underway, and we are moving forward with our client credit unions by our side. Contact us today to discuss ways to prepare for the digital future.
And be sure to join us at an upcoming CO-OP Roadshow in a city near you. We’ll be presenting seven strategies to accelerate digital transformation at your credit union along with the latest consumer trends you need to know. See the full schedule: http://co-opthink.org/event-types/regional/